RT200: Summit bolsters prospects for Nigeria’s non-oil exports
The highly informative presentations and discussions at the first edition of the bi-annual RT200 non-oil export summit, held in Lagos last Thursday, must have reinforced the conviction of the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, in the country. ability to derive substantial foreign exchange earnings from non-oil exports, writes TONY CHUKWUNYEM
When the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, at the first meeting of the Bankers’ Committee of this year, held on February 10, unveiled the intervention program codenamed “Course to $200 billion in foreign exchange repatriation (RT200 FX Programme), which aims to help the country attract $200 billion in foreign exchange repatriation, exclusively from non-oil export transactions over the next three to five years, he explained that the program was anchored on five pillars.
According to him, the five pillars – Value Added Export Facility, Non-Oil Commodity Expansion Facility, Non-Oil Currency Reimbursement Program, Dedicated Non-Oil Export Terminal and Semi-Annual Non-Oil Export Summit – were all essential to ensure that the RT200 programme, which is an initiative of the Bankers Committee, fulfills its objective of significantly reducing Nigeria’s dependence on crude oil exports. He pointed out that the apex bank was stepping up its efforts to boost non-oil export earnings because the country’s four main sources of foreign exchange inflows – oil export proceeds, non-oil export proceeds, remittances from diaspora and foreign direct/portfolio investment – had been negatively impacted by the COVID-19 crisis.
The CBN Governor said, “I think the lessons we have learned from our remittance policies can be applied to improve certain aspects of the inflow of foreign currency into the country. For example, we have all witnessed the ever-changing fortunes of oil-exporting countries.
Even those who are known to manage their oil revenues well also suffer major shocks once oil prices fall. “In order to avoid these sudden adjustments in our economic life, we need to focus on strategies that can help us gain more stable and sustainable currency inflows. We would need to follow the best practices of other countries and make sure that we protect ourselves a bit from factors that are beyond our immediate control.
However, given the important role that access to finance plays in determining the success or failure of a business, the third pillar of the RT 200 program – Non-oil FX Rebate Scheme – has been the most important aspect. most discussed about the program since its unveiling. For example, the Bankers’ Committee told reporters at the end of its second meeting this year on April 14 that the CBN had given 3.5 billion naira rebates to 150 eligible exporters through depository banks (DMBs). under the rebate program. The committee also revealed that through the program, the country had earned $60 million in non-oil foreign exchange earnings. However, despite the fact that several DMBs have held awareness seminars on the RT 200 program over the past few months, most stakeholders were still eagerly awaiting when the CBN would host the first bi-annual non-oil export summit in the country. program.
It is therefore not surprising that the first edition of the summit was well attended by banking sector stakeholders (including CBN Deputy Governors, DMB CEOs and maritime sector stakeholders), Nigeria Port Authority (NPA), Nigeria Customs Service (NCS), exporters, as well as players in the logistics space.
In his opening remarks for the summit, themed: “Setting the roadmap towards realizing RT200 and non-oil exports for development”, Emefiele announced that the CBN had recorded a significant increase in the repatriation of exports non-oil in the first quarter after the take-off of the RT200 program. He also confirmed that the apex bank had released over N3.5 billion through DMB in remittances to eligible non-oil exporters during the first quarter of this year.
The CBN Governor explained that the summit aimed to harness ideas on how to increase the value and volume of exports in the country, as well as improve the availability of foreign currency. He called on stakeholders in the non-oil export space to work with the CBN and DMBs to ensure improved export operations which will lead to foreign exchange inflows into the country, saying the apex bank would prefer a situation where she would no longer sell. dollars to DMBs, as lenders would be able to generate their own dollars to meet the import needs of their clients. He regretted that most of Nigeria’s current sources of foreign exchange inflows are unreliable and externally controlled.
Emefiele said, “We have all witnessed the ever-changing fortunes of oil-exporting countries. Even those who are known to manage their oil revenues well also suffer major shocks once oil prices fall. According to him, in order to insulate the Nigerian economy from such external shocks, stakeholders need to focus on strategies that can help the country earn more stable and sustainable foreign exchange inflows. “As things stand, we really have no choice but to look within and find innovative solutions to our problems. We should follow best practices from other countries and ensure that we we shield a bit from factors that are beyond our immediate control,” he said, urging presenters, panelists and summit participants to come up with innovative solutions to Nigeria’s non-oil export challenges.
The CBN helmsman said while the RT 200 program’s goal of raising $200 billion in non-oil export revenue over the next three to five years might seem out of reach to some people, he was “resolute and determined that we can achieve this,” noting that “many countries that are much less endowed than Nigeria are doing this.” Emefiele pointed out that although the demand for dollars in the country continues to head north, the CBN has struggled to manage both demand and supply to meet foreign exchange obligations. However, he stressed that “monetary policy alone cannot bear the full weight of the expected adjustments needed to manage these difficulties.
These issues call for the urgent design and resolute implementation of other supportive, structural and complementary policies that are broad, coordinated and focused on complementarity of the work of the monetary authority. The summit also saw presentations on key issues in the non-oil export sector by managing directors from some of the country’s major lenders. For example, the GMD/CEO, Access Bank Holdings, presented a paper on logistics, titled: “Addressing Logistics Constraints to Improve Non-Oil Exports”, which focused primarily on the challenges faced by operators in the maritime industry. are facing the Apapa. and the ports of Tin Can Island in Lagos.
Following the roundtables on the Wigwe document and Emefiele’s call for the Nigerian Ports Authority (NPA), the Nigerian Customs Service (NCS) and other stakeholder groups in the value chain of exports are collaborating with the CBN and DMBs to support the RT200 program, the Bankers Committee, the NPA and the NCS have decided to form a task force to identify and implement measures to address the factors that hinder exports non-oil. Emefiele pointed out that achieving the objectives of the program requires partnership and support from all government agencies and stakeholders. He said: “We are just lucky to have Nigerian ports, customs here. I want to appeal to both parties to form and establish a task force comprising the Bankers Committee, Nigeria Ports Authority, Nigeria Customs Service, possibly a shipping company, to resolve the issues. “We have heard of people who want to export goods out of Nigeria queuing for months before their goods can come out. Time is against us. In the short term, what can the NPA and Customs do for exporters? Whether you want to create a dedicated route where they can easily export their goods. We desperately need those export earnings. “It is unfortunate that due to the problem of trying to find an easy route for goods to be exported out of the country, Nigerian exporters now prefer to transport by road. I even hear some of them transporting from Lagos to Accra or Benin Republic and then exporting goods from there. In doing so, we lose the opportunity for these export earnings. Customs and NPA, the task force, we want you to look at the long term and the short term. Indeed, by the end of the summit, the consensus among attendees was that the event had highlighted key areas of the RT 200 program which, if the Committee of Bankers took action to address them, would ensure the success of the program.
However, some are concerned that most of the challenges affecting the non-oil export sector are structural in nature and therefore can only be effectively addressed by fiscal authorities.